Globalisation and the international markets for Mediterranean export commodities : the case of olive oil, 1850-1938

Abstract

Globalisation was a crucial feature of the nineteenth century international economy. This Doctoral Thesis explores the impact of the globalisation phenomenon on world markets for Mediterranean export commodities by focusing on the case of olive oil between the 1850s and the 1930s. Olive oil was, and still is, a Mediterranean product. Ranking among the most important crops, it was also a major export commodity as well as one of the few products in which most of the Mediterranean countries enjoyed a comparative advantage in international markets. As in many other commodity markets, the first economic globalisation transformed the world olive oil market and this research aims at explaining why this transformation took place and what it consisted in. The following pages argue that trade costs reduction and mass migration were critical factors in reshaping the international market for the product. One of the major effects of the first globalisation was that it reduced export markets for olive oil, damping therefore the expected benefits on economic growth that might be derived from export trade. Additional effects of globalisation consisted in a profound alteration of trade flows, particularly as far as import trade is concerned, a radical transformation of the product mix that was put on foreign (and domestic) markets, and, finally, a crucial modification of export marketing. The impact of globalisation was far from homogenous, however. This research shows that export performance differed across countries, either in terms of market shares or regarding the orientation of their exports. Globalisation forces, in fact, pushed towards the emergence of specialisation patterns across exporters and this thesis explores the determinants of such an important process. It advocates a rather integrative approach. It supports the hypothesis that cross-country differences in factor prices and technology, which probably reflected differences in factor endowments, combined with the existence of product differentiation explain countries’ specialisation patterns in the international olive oil markets before World War II. Thus, while the impact of the first globalisation is the central theme, two leading topics in economic history and economics underlie the present research. The first one concerns the relationship between export trade and its potential effects on the economic growth of the Mediterranean countries. The second one deals with the countries’ export performances and, more particularly, with patterns of specialisation in international markets for agricultural products and foodstuffs and their determinants.